News Archive

"Severance agreements can serve both employers and employees. You can obtain closure, reduce risk, and protect legitimate business interests. Employees can receive transition pay, benefits, and certainty. But these agreements shouldn't be treated as forms pulled from an old filing cabinet. You should confirm compliance with current law, and employees should understand what they are receiving, what they are releasing, and what obligations will continue."  MORE >>

"Akin to other employment-related contracts, severance agreements are governed by applicable federal and state law. When drafting, negotiating, and enforcing a severance agreement, an employer must avoid various pitfalls, comply with federal and state statutes, and afford the departing employee certain rights. Not doing so may cause the severance agreement to be unenforceable, in whole or in part, and may subject an employer to wrongful termination claims or other redress."  MORE >>

"[T]he Fourth Circuit affirmed the dismissal of a class action in which Plaintiffs attempted to collect a federal judgment against a defunct employer by suing a private equity firm and fifteen related individuals and entities on alter ego and veil-piercing theories.... The Fourth Circuit concluded that because Plaintiffs' suit was based exclusively on veil-piercing and alleged no new or additional ERISA or WARN Act violations, and because their voluntary dismissal of Garrison from the original suit resulted in a judgment against BCI only, the district court correctly held that it lacked federal subject matter jurisdiction." [Messer v. Garrison Investment Group, LP, No. 25-1657 (4th Cir. May 26, 2026)]  MORE >>

"While the Morgan Stanley dispute is still pending in the Southern District of New York, recent developments in the Fourth Circuit have indirectly affirmed the conclusion of the [DOL Advisory Opinion 2025-03A] by establishing certain factors that the court used to determine ERISA versus non-ERISA status with respect to compensatory arrangements.... The Fourth Circuit established a non-exhaustive list of six factors to be considered when determining whether an incentive compensation program is an ERISA-exempt bonus plan." [Milligan v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. 25-1385 (4th Cir. Apr 14, 2025)]  MORE >>

37 pages; updated May 4, 2026. "This roundup focuses on recent federal and state actions to restrict noncompete provisions and provides links to federal and state resources from organizations, government websites, third-party resources, and news articles. The aggregated content in each section is organized in reverse chronological order[.]"  MORE >>

"Two unpublished decisions involving the same change in control severance plan went in opposite directions on the standard of review. In 2026, the Fifth Circuit applied abuse of discretion based on plan language delegating interpretive authority to the administrator. In 2025, the Tenth Circuit applied de novo review to similar facts involving the same plan because it viewed the delegation as triggered only by textual ambiguity. The divergent results underscore the importance of carefully drafted discretionary authority clauses in top hat severance plans, particularly for employers seeking to avoid de novo review of factual eligibility disputes." [Miller v. Anadarko Petroleum Corporation Change of Control Severance Plan, No. 25-20113 (5th Cir. Feb. 26, 2026; unpub.); Hoff v. Amended and Restated Anadarko Petroleum Corporation Change of Control Severance Plan; No. 23-1361 (10th Cir. Feb. 4, 2025; unpub.)]  MORE >>

"[T]he Fourth Circuit affirmed a district court's order granting summary judgment to Merrill Lynch, holding that the company's WealthChoice Award program -- a contingent cash incentive requiring eight years of continuous employment to vest -- is an excepted bonus payment plan under 29 C.F.R. § 2510.3-2(c) and does not qualify as an ERISA-covered employee pension benefit plan." [Milligan v. Merrill Lynch, No. 25-1385 (4th Cir. Apr. 17, 2026)]  MORE >>

"Under SB170, if an employee with a non‑compete is fired 'without cause,' then the non‑compete is unenforceable unless the employer provides 'severance benefits or other monetary payment,' which must be 'disclosed upon execution' of the agreement. The law does not define 'cause,' 'severance benefits,' or 'other monetary payment.' Nor does the law mandate that the required monetary payment fully compensate the employee for the restricted period. The law affects only non‑competes entered into or amended on or after July 1, 2026."  MORE >>

"[T]he Board applied McLaren, a significant 2023 decision holding that merely offering a severance agreement with overly broad confidentiality or non-disparagement provisions may violate the National Labor Relations Act. Applying that standard, the Board found Prime Communications violated Section 8(a)(1). The Board ordered Prime Communications to rescind the unlawful provisions, notify affected former employees, and post a remedial notice." [Prime Communications, No. 16-CA-309916 (Apr. 7, 2026)]  MORE >>

"ERISA coverage provides for many advantages, and the related compliance requirements are not particularly onerous. This article discusses what causes a severance plan to be subject to ERISA, the consequences that result, and the advantages of ERISA coverage."  MORE >>

"Under the bill, if an employee subject to a non-compete is fired without cause, the agreement is unenforceable unless the employer provides severance pay or another form of monetary compensation. However, if the employee is fired 'for cause', the non-compete agreement is enforceable. The proposed law also requires employers to disclose any severance benefits or payments at the time the non-compete agreement is executed."  MORE >>

"The Sixth Circuit affirmed summary judgment for an employer after finding that a former employee's severance release was knowing and voluntary under all five factors the court applies, rejecting her claims of racial discrimination, gender discrimination, retaliation, and hostile work environment. The decision is a practical checklist for any employer that uses severance releases." [West v. Dow Chemical Co., No. 25-1681 (6th Cir. Mar. 10, 2026; unpub.)  MORE >>

"[T]he federal government has moved to dismiss a suit from a trio of former Morgan Stanley financial advisers that had filed suit regarding a [DOL] advisory opinion that said the bank's deferred compensation plans likely aren't protected under ERISA."  [Sheresky v. U.S., No. 25-8935 (S.D.N.Y. complaint filed Oct. 28, 2025; defendant's motion to dismiss filed Mar. 11, 2026)]  MORE >>

"[T]he Fifth Circuit affirmed summary judgment in favor of a change-of-control severance plan, holding that the plan conferred discretionary authority on the administrative committee and that the committee did not abuse its discretion in concluding that the plaintiff failed to establish 'Good Reason' for resignation." [Miller v. Anadarko Petroleum Corporation Change of Control Severance Plan, No. 25-20113 (5th Cir. Feb. 26, 2026]  MORE >>

"From a company perspective, lump sums are operationally simple but hit budgets immediately. Salary continuation spreads costs over time but adds administrative work....For employees with stock options ... [m]ost companies (62%) continue to rely on a 90‑day exercise window.... Nearly a third (28%) offer a tenure‑based approach with longer windows for longer service. Only 10% extend beyond 90 days, even though employees often push for more time."  MORE >>

"What truly distinguishes severance pay is not its purpose, but its trigger: termination. The court adopted a straightforward definition used in prior Colorado cases: severance pay is 'payment by an employer to its employee beyond the employee's wages upon termination of the employment relationship.' " [Sommers v. MarketPlace Realty, LLC, No. 24CA2155 (Colo. App. Dec. 24, 2025)]  MORE >>

"Because the incentive award amount was tied in part to revenue generated by each adviser, the court labeled it a 'commission,' not a bonus -- a distinction that ultimately pushed the entire arrangement into ERISA territory.... The DOL noted that bonus programs often use complex formulas, include tenure-related rewards and sometimes allow payouts after certain types of termination from the program, such as death or disability. None of those features, in the agency's view, automatically transform an incentive plan into a pension plan designed to provide retirement income." [Shafer v. Morgan Stanley, No. 24-3141 (2d Cir. Jul. 9, 2025); DOL Advisory Opinion 2025-03A]  MORE >>

"The Sheresky plaintiffs allege that Morgan Stanley improperly lobbied the DOL in an 'ex parte process' for over a year ... They further allege that Morgan Stanley is impermissibly utilizing the Advisory Opinion in the arbitrations to argue that because the DOL's 'official position' is that the Program is not governed by ERISA, the financial advisors' claims are frivolous and must be dropped, and that Morgan Stanley will seek attorneys' fees if the arbitrations proceed." [Sheresky v. Chaves-DeRemer, No. 25-8935 (S.D.N.Y. complaint filed Oct. 28, 2025)]  MORE >>

"Three former Morgan Stanley financial advisers ... [allege] the agency acted unlawfully when it issued an advisory opinion siding with Morgan Stanley about whether certain deferred compensation plans are protected under [ERISA]. The lawsuit ... claims the DOL's [Advisory Opinion 2025-03A] violated the Administrative Procedure Act and unfairly interfered with ongoing arbitration proceedings." [Sheresky v. Chaves-DeRemer, No. 25-8935 (S.D.N.Y. complaint filed Oct. 28, 2025)]  MORE >>

"There are several arbitrations and even lawsuits over the Plan which Morgan has been defending for years. In those cases, the plaintiff-advisors maintain that the Plan is subject to ERISA and violates its minimum vesting rules. Morgan has been winning many arbitrations. However, in July the United States Court of Appeals for the Second Circuit held the Plan was subject to ERISA and the plaintiff's in the class action could go to arbitration with their claims.... The DOL's Advisory Opinion gives Morgan even more ammunition to defend the arbitrations and may even chill future claims." [Shafer v. Morgan Stanley, No. 24-3141 (2d Cir. Jul. 9, 2025).]  MORE >>

"For wealth advisors and RIAs, the implications of this ongoing dispute extend beyond the legal maneuvers. Deferred compensation remains a powerful retention tool across the wirehouse and brokerage landscape ... If courts or regulators were to determine that such programs fall under ERISA, it could significantly alter how firms structure advisor pay, adding compliance burdens and limiting forfeiture provisions that firms rely on to retain talent." [DOL Advisory Opinion 2025-03A; O'Neill v. Morgan Stanley, No. 24-00358 (FINRA Aug. 8, 2025)]  MORE >>

"The DOL's opinion, which was requested by Morgan Stanley outside counsel, comes on the heels of a string of arbitration victories for the firm in disputes over deferred compensation. Over the past two years, it has successfully defended at least five consecutive challenges, saving millions of dollars and further solidifying its stance that its plans are lawful and enforceable."  MORE >>

"[In] the Department's view, the mere fact that the terms of the program contemplate limited situations where an award could be paid after termination of employment does not implicate a deferral of income of the kind contemplated by ERISA section 3(2)(A). Thus, the Department has no reason to believe that the deferred incentive compensation program is an employee benefit pension plan under ERISA section 3(2)(A) as a result of such surrounding circumstances."  MORE >>

"Shortly before a reduction in force took effect, an employee was terminated for cause and informed that she was not eligible for benefits under the employer's ERISA-covered severance pay plan. Rather than file an appeal under the plan's claims procedures, the employee sued under state law ... [T]he First Circuit concluded that the employee had merely attempted an 'end run' around ERISA with allegations that she relied on misleading statements when not claiming benefits under plan procedures. But ERISA provides the exclusive cause of action in precisely such circumstances." [Orabona v. Santander Bank, N.A., No. 24-1905 (1st Cir. Jun. 16, 2025)]  MORE >>

"A recent First Circuit decision ... illustrates how ERISA preemption of state law protects employers where a former employee asserts state law claims alleging improper termination of employment to avoid paying severance benefits. This post describes the benefits of ERISA preemption, provides an overview of the First Circuit decision, and highlights key aspects courts look to in determining whether a severance program is an ERISA plan." [Orabona v. Santander Bank, N.A., No. 24-1905 (1st Cir. Jun. 16, 2025)]  MORE >>